Read this article to learn about one of the fundamental terms in economics: marginal analysis. Specifically, understand the concept of marginal benefit and marginal cost and what is meant in economics when we say that individuals make rational choices at the margin. Also, complete the problems in the "Try It" box and check your answers.
- Suppose the relationship between your study time and your grade on a History midterm is given by the following table:
|If you study for||Your grade will be|
What is the "marginal grade improvement (MGI)" of the 5th hour of studying?
2. What is the "marginal grade improvement (MGI)" of the 6th hour of studying?
3. Why might the MGI be diminishing?